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Gold/Mining/Energy : Gold Price Monitor -- Ignore unavailable to you. Want to Upgrade?

To: Enigma who wrote (22281)	10/26/1998 11:46:00 AM
From: gmccon	Respond to of 116800

CNBC just reported that on doctors orders, Yeltsin cancelled a trip to Austria.

To: Enigma who wrote (22281)	10/26/1998 1:55:00 PM
From: Zardoz	Read Replies (2) \| Respond to of 116800

"...in other words where is gold compared to 1971 after adjusting for inflation? We can then see the real increase in constant dollars from $35/ounce." Gold is an inflation hedge, not a growth commodity. You can't apply inflationary parameters to commodities. They don't have growth. Only direct interest bearing instrument are effected by inflation.

To: Enigma who wrote (22281)	10/26/1998 5:07:00 PM
From: E. Charters	Read Replies (1) \| Respond to of 116800

The way to do it is to use the inflation rate and not the interest rate. The interest rate theoretically measures the increase in real wealth over time. It is always about 3% on the average. The bank rate is a combination of the interest rate multiplied by the inflation rate. So on a bank rate of 9% and a real interest rate of 3% the inflation rate is 5.8%. 1.03 X 1.058 = 1.09. The interest rate average for 71 years is supposed to be about 1.09 or 9%. I don't know if that is true. For many years it never went over 3%.(there was still serious hidden inflation in those times) In the 80's it hit double digits for many years and that is where most of the inflation came from. If we take 5.8% for 70 years we get a factor of about 55 times on the inflation index. Gold then should be worth between 1200 and 1925 dollars per ounce depending on where you start 1929 or 1934. EC<:-}